He said: “Most hedge fund strategies are more about very competent implementation and fair fees and terms, than they are about ‘genius’.”

His criticism comes amid a chorus of rebellion against high fees. Investment consultants, which include Cardano and Towers Watson, have already been pushing investors to ensure that they are paying fair fees and not automatically the standard 2% management and 20% performance fees.

Christopher Parkinson, head of manager research at Cardano, whose clients have $5bn invested in hedge funds, said: “There is a fair proportion of returns that don’t deserve ‘two and 20’. On average, there’s beta, a whole load of factor exposures and a little bit of alpha. There is often a desire to attribute everything non-beta to alpha but this is misleading.”

Parkinson added that hedge fund managers would continue to come under pressure to lower fees, “unless they can demonstrate they are offering something generally capacity constrained or unique”.

Ewan Kirk, founder of quantitative hedge fund manager Cantab Capital, said last month that investors were being overcharged by many big quant funds because the trading strategies they provide can be delivered for far lower costs.

Cantab has unveiled a new fund which has $25bn capacity and charges only a 0.5% management fee and a 10% performance fee.

Chris Keen, a partner at Culross, said: “There is a limited number of arbitrage managers so lower fees seem fair given the greater effort needed to look through a bigger pool of managers for our other funds.”

Billionaire philanthropist and former hedge fund manager George Soros said in a television interview at the World Economic Forum in Davos last month that institutions that invest in the industry should expect poor performance, in part because managers’ high fees eat into profits.